Selling Gold in California: Taxes, Dealer Rules, and How to Get the Best Price

Two tax systems apply when Californians sell gold. One hits the buyer (sales tax, governed by CDTFA Regulation 1599 and its transaction threshold). The other hits you as the seller (state and federal income tax on your profit). Understanding both before you walk into a dealer saves real money, and California’s rules on both sides differ from most other states.

California Sales Tax on Gold: The Regulation 1599 Threshold

California exempts certain precious metals from sales tax, but the exemption is conditional. CDTFA Regulation 1599 covers monetized bullion, nonmonetized gold and silver bullion, and numismatic coins. The exemption applies only when a single transaction exceeds the dollar threshold set under the regulation.

The California Department of Tax and Fee Administration adjusts this threshold periodically. It has been cited at approximately $2,000 per transaction. Verify the current figure at cdtfa.ca.gov/industry/precious-metals.html before your sale, since the amount is subject to regulatory adjustment. This is a threshold the buyer cares about when purchasing from a dealer; when you are the seller handing gold to a dealer, sales tax does not apply to your act of selling.

If the buyer’s single purchase falls below the threshold, they pay California state sales tax plus any local district taxes. The statewide base rate is 7.25%. Local add-ons push the combined rate higher in most California communities: Los Angeles County charges 10.25%, San Francisco charges 8.625%, and some districts exceed 10.5%. Use the CDTFA tax rate lookup tool to confirm the rate for your specific ZIP code.

As the seller, your tax exposure on the sale itself falls entirely under income tax, not sales tax. The income tax calculation is covered in the next section.

What qualifies for the Regulation 1599 exemption

Three categories of precious metals qualify when the transaction value clears the threshold:

• Monetized bullion: coins issued as legal tender, such as US American Eagles, US Buffalos, and Canadian Maple Leafs
• Nonmonetized gold and silver bullion: bars and rounds valued primarily for their metal content
• Numismatic coins: coins whose value is driven primarily by rarity or collector demand rather than metal content alone

Gold jewelry does not qualify. Neither does gold used for industrial or manufacturing purposes. If you are selling inherited jewelry rather than bullion or coins, the buyer may owe sales tax regardless of transaction size. A tax advisor can clarify how Regulation 1599 applies to your specific items.

Capital Gains When You Sell Gold in California

California diverges sharply from the federal baseline here. Both levels of tax apply when you profit from a gold sale, and the California treatment is more costly than most sellers expect before they run the numbers.

Federal tax: the 28% collectibles cap

The IRS classifies gold coins, bullion, and most precious metals as collectibles under IRC Section 408(m). When you sell a collectible held for more than one year, the federal long-term capital gains rate is capped at 28%. That cap is higher than the 15% or 20% rate that applies to stocks and real estate, but it does set a ceiling on federal liability.

Hold your gold for one year or less? The profit counts as short-term capital gain and is taxed at your ordinary federal income rate, which runs from 10% to 37% depending on total taxable income. See IRS Topic 409 for current rates. Consult your tax advisor to confirm how these apply to your specific situation.

A sale at a loss can offset capital gains in the same tax year. Keeping records of your original purchase price, including dealer premiums paid, is essential. Those premiums are part of your cost basis and reduce the taxable gain dollar for dollar.

California: ordinary income, no collectibles break

California does not recognize the federal collectibles cap. The state taxes all capital gains, including long-term gains on gold, as ordinary income at your regular California rate. There is no 15%, 20%, or 28% preference at the state level. California income tax brackets run from 1% on the first taxable dollars up to 12.3% on the highest bracket, with an additional 1% Mental Health Services Tax on income above $1,000,000. Verify current year brackets at ftb.ca.gov.

A California resident selling gold at a long-term profit faces the federal 28% collectibles cap plus the California ordinary income rate. For a seller whose California rate is around 9.3%, the combined tax on the long-term gain is roughly 37.3%. For a top-bracket California earner, the combined rate reaches approximately 41.3%. Short-term gains can be taxed even higher because both the federal ordinary rate and the California rate stack at their full marginal levels.

Rates are approximate and for informational purposes only. Individual tax situations vary. Consult a licensed tax advisor before making any sale decision.

Cost basis and inherited gold

Your taxable gain is the sale price minus your cost basis. When you bought the gold yourself, your cost basis is what you originally paid, including any dealer premiums. When you inherited the gold, federal law generally gives you a stepped-up basis equal to the fair market value on the date of the original owner’s death. That step-up can sharply reduce your taxable gain if gold prices rose significantly during the decedent’s lifetime.

California conforms to the federal stepped-up basis rules for inherited assets. There is no California-specific surcharge on inherited precious metals sales. To document the stepped-up basis, have a qualified appraiser determine the fair market value on or around the date of death. Our guide on taxes when you sell gold covers cost basis rules in full detail.

California Dealer Rules: Your Consumer Protections

California regulates businesses that buy used property from the public, including precious metals dealers. These rules create a paper trail that deters theft and protects sellers. When you understand them, you can use them to your advantage.

The Business and Professions Code framework

California Business and Professions Code Sections 21625 through 21647 govern secondhand dealers. Any business that regularly buys used articles from the public, including gold, silver, jewelry, and coins, must comply. The core requirements a licensed California dealer must follow when buying from you:

• Identification: the dealer records your name, address, and ID number from a government-issued photo ID
• Thumbprint: California law requires dealers to record a thumbprint from the seller
• Item description: the dealer documents each item purchased, including weight, purity markings, and any identifying inscriptions
• Police reporting: dealers must submit purchase records to local law enforcement, typically within 24 hours, so stolen property can be identified
• Hold period: dealers are required to hold purchased items before reselling or melting them, giving law enforcement a window to cross-reference the items

The hold period is usually 30 days for general secondhand dealers under state law, though local ordinances in some California cities extend it further. Verify the current hold period with your local police department or through the California Attorney General’s consumer protection resources.

Coin dealer provisions

California Business and Professions Code Section 21635 carves out specific rules for coin dealers. Businesses that deal primarily in coins and numismatic items may face different documentation requirements than general secondhand dealers. A licensed coin shop buying your coins may not be subject to the same 30-day hold that applies to a general pawn or secondhand dealer.

Before selling to any dealer, ask two direct questions: “Are you licensed as a California secondhand dealer or coin dealer?” and “What is your hold period on this purchase?” A legitimate dealer answers both without hesitation. Reluctance is a red flag worth acting on by walking away.

Protections you should use

Get a written receipt for every transaction. The receipt should include: the dealer’s name, address, and license information; a detailed description of each item sold; the weight and purity as documented by the dealer; the price paid; and the date. This receipt is your paper trail for any dispute and your tax documentation when you need to show the sale price for your tax return. If a dealer will not provide a written receipt, do not complete the sale.

California’s ID and reporting requirements also mean that any dealer who buys from you without collecting your ID is operating outside the law. You can report unlicensed secondhand dealers to your county sheriff’s department or to the California Bureau of Security and Investigative Services.

How to Get the Best Price for Your Gold in California

The spread between the best and worst offer for the same piece of gold in California can exceed 20%. The state has a dense population of buyers, from refiners to pawn shops to online buyers. That competition works in your favor when you use it deliberately.

Know the spot price before any conversation

The spot price is the live market price for one troy ounce of refined gold. It changes throughout the trading day and is set on global commodity exchanges. Check the current price on our gold value calculator before you contact any dealer.

Your gold will not trade at exactly the spot price. Refiners typically pay 96% to 98% of spot for large quantities of standard bullion bars. Coin dealers pay 90% to 95% for common bullion coins like American Eagles. Pawn shops often offer 70% to 85%. For gold jewelry, buyers calculate value by weight after stripping out any non-gold elements, which can produce offers well below what you originally paid for the piece.

Knowing spot price lets you evaluate any offer in real time. A dealer offering “top dollar” who is actually paying 65% of spot is not offering top dollar. You will know the difference.

Types of buyers in California and what to expect

Refiners pay the closest to spot for large quantities of refined metal. They are not set up for retail walk-ins and typically require minimum transaction sizes. For accounts over $5,000 in standard bullion bars, contacting a refinery directly can add percentage points to what you receive.

Specialized gold and coin dealers offer a middle ground. Dealers who focus exclusively on precious metals understand the products better than general pawn shops and typically pay higher percentages. Look for members of the Professional Numismatists Guild or the American Numismatic Association, both of which have member conduct standards.

Pawn shops are convenient and fast, but they consistently pay the lowest percentage among physical buyers. Use a pawn offer as a floor to establish the minimum, then look for better.

Online gold buyers mail you a payment after you ship. The process takes several days and requires you to insure the shipment. The pricing can be competitive because online buyers operate at lower overhead. Fully insure any shipment through a carrier that provides documented proof of delivery before you release the package.

Browse our verified California gold dealer directory and California coin dealer directory to compare options with reviews. All listed businesses have verified addresses and operating histories on the platform.

Also see how California compares to other states on bullion sales tax exemptions, especially relevant if you live near a state border.

Get at least three written offers before you commit

Most sellers walk into a single store and accept whatever is offered. Getting three written offers takes one afternoon. The difference between the first offer and the best of three is routinely 5% to 15%. Written offers also give you negotiating leverage with a preferred buyer who is not the highest bidder.